Demand remains robust for UK manufacturers

Manufacturing firms reported that order books were robust in August, while expectations for selling prices ticked up, in accordance with the CBI’s latest monthly Industrial Trends Survey.

The survey of 432 manufacturers learned that total order books and export order books were strong in August. The firming in export orders compared to the last month reflected rising orders in 10 of the 17 manufacturing sub-sectors, led by mechanical engineering and aerospace.

Output growth remained strong and broad based and is expected to remain so within the next quarter.? Meanwhile, firms’ expectations for output price inflation acquired again after having eased briefly. However, they remained below while in the first part of 2017.

Stocks were considered to be just above adequate levels, after dipping below in July, but remained inside of the long-run average.

Anna Leach, CBI Head of Economic Intelligence, said:?”There are further signs that exporters are feeling the benefit through the lower pound on this month’s figures, and output growth is anticipated to turn on covering the coming quarter.

“But after a brief pause recently, expectations for selling prices have rebounded, indicating which the squeeze on consumers is set to persist. We expect CPI (Consumer Price Index) to top out at approximately 3% towards the end for this year and remain near that level during 2018, because effect within the weak pound is constantly feed through.”

Key findings:

  • 30% of manufacturers reported total order books being above normal, and 17% said we were looking at below normal, giving an account balance of +13% – over the long-run average of -14%
  • 22% of firms said their export order books were above normal, and 10% said we were looking at below normal, giving a rounded balance of +11% – well across the long-run average of -19%
  • 42% of companies said the total number of output over the last with three months was up, and 12% said hello was down, giving an account balance of +30% – above the long-run average of +3%
  • Manufacturers expect output to grow in the same robust pace within the coming quarter, with 38% predicting growth, and 7% a decline, giving a rounded balance of +30% – higher than the long-run average of +8%
  • Expectations for increase average selling prices with the coming ninety days were higher in August (+19%) compared to were in the month before (+9%) C across the long-run average of +2%
  • 15% of firms said their present stocks of finished goods are greater than adequate, whilst 11% said these were below adequate, giving a balance of +4% C under the long-run average (+13%).

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